FBR’s half-baked reform outline could create unimaginable chaos, officials warn

• No details about the plan have been released for public comment.
• The new structure would require modification of rules, laws.
• FBR officers express apprehensions over the half-baked summary.

ISLAMABAD: The proposed revamp of Pakistan Federal Board of Revenue (FBR) if fully implemented will require more than 1,000 changes in existing tax laws and rules, so any half-hearted strategy can create unimaginable chaos for the state.

There are two options as the current proposed plan would require the caretaker government to either completely repeal the FBR Act 2007 or make extensive amendments through an ordinance as under this Act the board is a legal forum and all members of the FBR are on this board.

The chairman is one of the members of this board and all the powers exercised by the members have been delegated to them, including the chairman, by the said board.

Under Section 5(1) of the FBR Act, the board, through the board, is empowered to transfer and post any employee of the board. Further, the board has authorized the FBR chairman for such transfers and postings.

Top official sources on Thursday pointed out that there is a valid question whether the current line-up of commissioners has the power to amend more than half a dozen laws in the absence of Parliament or will simply window shop through the machinery of provisions where the FBR has been vested with legal powers.

The second question is whether the caretaker minister received the confidence of the International Monetary Fund (IMF) and the World Bank before proposing drastic changes to the country’s tax system.

Caretaker Finance Minister Dr Shamshad Akhtar has so far not bothered to take the public into confidence, so details of the exact proposed plan were not shared to get comments.

In such a fluid situation, FBR officers fear that if such a half-baked summary was approved by the federal cabinet without taking feedback from the public, tax officials and independent experts, the tax system would grind to a halt. creating unimaginable chaos for the country’s fiscal situation.

According to the details gathered by The newsthe laws and rules would need to be amended once this new structure of tax mechanism is created.

Without all these amendments to all relevant tax laws and tax mechanisms, the tax system would for all practical purposes grind to a halt and jeopardize tax collection streams. There will be a requirement to make 263 changes in the Income Tax Ordinance 2001, while 154 changes will be made mandatory in the Income Tax Rules.

131 changes will be required in the Sales Tax Act, 1990 and 171 changes will have to be incorporated in the GST rules.

In the Federal Excise Act (FED), 90 changes will be required, while in the FED rules, the government will have to bring about 55 changes. In the Customs Act, 1969, the FBR will have to amend 156 changes in the law.

Further, the FBR contacted this scribe and said that the officers of the Internal Revenue Service (IRS) were expressing their concerns about the proposed scheme.

When asked to share details of the plan through the minutes of the inter-ministerial meeting under the auspices of the SIFC, the official replied that the minutes of the meeting belong to the Ministry of Finance.

The official added in the same breath that the finance ministry had issued a press release a few days ago.

This scribe reminded him that there was no substantial information on the proposed restructuring plan, so how could the government justify such huge steps based on just a few rhetorical statements issued by the Treasury without any details whatsoever.

The FBR chairman, when asked about his view on the proposed scheme, did not give any reply till the filing of this report.

Originally published on The news